Canadians asked to weigh in on new open-pit oilsands mine

This story was originally published Sept. 8.

Amid all the controversy surrounding the Energy Eastand TransMountainpipelines,there is anotherenergy project quietlymaking its way to public hearings.

A proposal to build anew oilsandsopen-pitmine called the Frontier Mine,the kind of project thatonceprovoked environmental activists to nickname Alberta's oilsands as "Canada's Mordor,"is takingcomments and heading to a public hearing in the coming months.

It may seem odd that amid Alberta'sworst economic downturn in decades, whereoilpatchinvestment hasfallen by 70 per cent, that thisvery expensive project is under consideration.

But Teck Resources, which owns the project, has sunk enough time and money into Frontier that it is pushing ahead with the regulatory approval and will decide whether to build at a later date.

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It is the biggest project under review by the Alberta Energy Regulator and the Canadian Environment Assessment Agency and the first major opportunity for Alberta's NDP government and the federal Liberal government to make a key decision on oilsands development and Canada's climate change targets.

"We support responsible oilsands development, but by definition, responsible means that it has to be consistent with Canada's and Alberta's objectives and environmental rules," said Simon Dyer, a regional analyst with the Pembina Institute.

The proposed Frontier mine is located110 kilometres north ofFort McMurray, around 40 kilometres from the Fort McKay First Nation's reserve. It is expected to cost upwardof $20 billion and construction could start as soon as 2019, with first oil coming in 2026.

Or it could never happen.

Drasticrecovery in oil prices needed

It is generally accepted that oil prices would have to recover dramatically, possibly back to triple digits, beforeFrontier would be considered economically viable.

"Frontier is a good name for it, because it'sreally on thefrontier ofoilsands mining, said Rob Mark, chairman of investment policy at investment firm 3Macs.

"It only makes sense with very high oil prices, but the regulatory process is long and at least you can warehouse itas a potential project if oil prices spike up again."

In the meantime, there's a policydecision to be made as to whether this project is good for Alberta and Canada.

The argument in favour of approval can be seen in the first comment submitted to the panel.

According to Teck, the project would employ upto 4,000 workers during construction and up to 2,500 workers during operation. Even if the first of those jobs wouldn't be created for at least three years, it's a hard argument to ignore in Alberta these days.

On the flip side, there are the cumulative effectson the water, air, wildlife and, importantly, the communities around Alberta's oilsands. There are already oilsands projects everywhere in the area will this one be the straw that breaks the camel's back?

Mine doesn't fit into oilsands emissions cap

There aren't hard limits oncumulative effects of oilsands development, but there are hard limits associated with the greenhouse gas emissions of the industry. In Alberta's climate change policy introduced in November 2015, oilsands emissions are not to exceed 100 megatonnes in any year.

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Those oilsandsemissions are currently at 70megatonnes, and Dyer said that there are already approvals in place for oilsands projects that will bring those emissions up to 130 megatonnes a year. That number can be reduced through technology and innovation, but there are questions about how to fit Frontier into that mix.

"With emissions under 70 now, there's room for growth, but clearly there is a gap in what companies want to produce and what Alberta's rules are,"said Dyer.

Earlier in the summer, the provincial government struck a panel to look into how to implement Alberta's climate change plan. The panel included activist Tzeporah Berman, who once wielded the "Mordor" term, along with longtime oil player Dave Collyer, former head of the Canadian Association of Petroleum Producers, and Melody Lepine, director of industry and government relations for the Mikisew Cree Nation.

It is theirjob to figure out how to implement thatoilsandsemissions cap, but it is not clear if their work will be done in time for Frontier hearings. Jim Ellis, chief executive of the Alberta Energy Regulator, said he did not know if the cap would be considered in the decision to approve or decline the mine.

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These hearings may not garner the attention that Energy East already has, but environmental groups will be watching the results closely.

Dyer said that the temperature has been lowered around oilsands issues in part because of Alberta's climate change plan, evidenced by the number of environmental groups on stage with government and industry when the plan was introduced.

"A big part of them being on that stage was the commitment that oilsands emissions wouldn't exceed 100 megatonnes," said Dyer.

"Proposinga very significant source of greenhouse gas pollutionat a time when both Alberta and Canada have made a commitment to reduce emissions, we're very interested in how they are going to square the circle."